Impact of Turmoil on the Handicraft Sector of Jammu and Kashmir: an Economic Analysis

Article

Impact of turmoil on the handicraft sector of Jammu and Kashmir: An economic analysis

Fayaz Ahamad* and Effat Yasmin

Department of Economics, University of Kashmir Srinagar, India.

Accepted 8 November 2012

The handicrafts of Jammu and Kashmir (J & K), namely, shawls, namdhas, wooden art-ware, papier- mache, crewel embroidery etc. are well known, yet the export from this sector has been of an average of around Rs. 20 crore per annum. However, the handicraft industry occupies an important position in the economy of J & K, which provides a gainful employment to more than 3 lakh people and too has the potential to generate more employment in near future. In absence of large scale industries in the State, handicrafts remained a key economic activity from times immemorial. Due to the instable political conditions and turmoil in the state, the performance of this sector got deteriorated. As per regression analysis the output of the sector has declined to a large extent. In this background, the paper will highlight the various aspects of turmoil on the handicraft sector of the state during the reference period.

Key words: Turmoil, potential markets, militancy, economic setbacks, handicraft exports.

INTRODUCTION

The recent decades have proved challenging for nations the important sources of livelihood of local people such due to emergence and escalation of a wide variety of as tourism, horticulture and handicrafts industries. violent conflicts around the globe. Regardless of the Besides exacting extensive damage to the infrastructure motives, violent conflicts prove disastrous in all aspects- of the region, the violent conflict has discouraged private political, socio-cultural and economic. Needless to add, investment, pushing the economy towards stagnation. violent conflicts create atmosphere which stunts The downward trend of economy has been acutely felt economic growth, destroys civic life and sows seeds of since late 1980s when militancy gained momentum. It is distrust, frustration and maligns future generations. And a vicious circle in which violence has led to Kashmir is no exception to this. This emerging scenario underdevelopment and vice versa, and in this gruesome appropriately fits into the discourse on Kashmir conflict scenario it is the common people of the region who suffer that is quite complex. This conflict is pronounced as one the most (Evans, 2000). The last decade has witnessed of the most complicated situation wherein on the one side many remarkable developments in the world, and the two nuclear powers are involved and on the other side wide reach of globalization is one among them. the people of the Kashmir valley in the Indian state of Conventional territorial boundaries and related disputes Jammu and Kashmir (J & K) developed alienation against are challenged by increasing trans-border commercial the Indian federal rule (Schofield, 2000). The economic and cultural exchanges and popular acceptance of cost of the conflict cannot be confined to a particular democratic means of conflict resolution. The Kashmir sector of industry or investment prospects. It has affected conflict is no exception to it (Mir and Ain, 2010). Though the Kashmir issue cannot be resolved only by means of economic development, vibrant economic growth in the region would not only better the lives of local people but *Corresponding author. E-mail: [email protected]. Tel: may infuse spirit of reconciliation and harmony among 9906339158 them. Ahamad and Yasmin 79

RESEARCH METHODOLOGY scale enterprises, which have not been able to wean themselves from generous subsidies to compete and This study is descriptive and analytical. The study is mainly based integrate with the national market (Shekhawat, 2009). on secondary sources data; however information has also been obtained from primary sources which include interviews, comments, Thus, the state of Jammu and Kashmir represents a observations, opinion, notes, etc. of the persons concerned with paradox where sectors that are relatively unaided have handicrafts sector and also from experts. The required secondary managed to carve a niche for themselves in the global data has been collected from various issues of Digest of Statistics, economy, while sectors that are the recipient of state J & K Economic Review and Economic Survey and various reports largesse have not been able to do so. of Directorate of Handicrafts government of J & K. To workout the difference between annual trend value and actual value of production and exports of handicrafts during last three decades that is, before turmoil and during twenty years of turmoil period, the Production of handicrafts formula of regression has been used: Notwithstanding the fact that Kashmiri arts and crafts Y = a + bX (1) have enjoyed worldwide fame and name, their production

Y = dependent variable; suffered to a large extent with the broke down of turmoil X = independent variable; in the valley in 1989. Not only their production but also a = intercept coefficient and b is the slope coefficient. The value of quality wise they are now less superior to the goods ‘a’ and ‘b’ is found by the following normal equations. produced in China, Nepal and Iran. Due to this reason, nowadays the export trade has not been able to capture

∑Y = Na + b∑X (2) its due share in the potential markets (Mahapatra and Shekhawat, 2008). The Table 1 shows year wise the 2 ∑XY = a∑X + b∑X (3) production of handicrafts of J & K during last three decades. The Table 1 reveals that the production of handicrafts RESULTS AND DISCUSSION has affected a lot during last 20 years of conflict. The value of production has deteriorated during 1989-90 as The state of Jammu and Kashmir and in particular the Rs.150 crores from Rs.154 crores in 1988-98, because Kashmir Valley has suffered severe economic setbacks this was the starting period of conflict in Kashmir and due to turmoil in the region over the past 20 years. Every during the peak seasons of turmoil i.e. from summer sector of economy has been affected, be it handicrafts 2008, 2009 and 2010, the production of handicrafts has production, the horticulture sector, medium and small- also deteriorated. scale industrial units, the tourism sector etc. What is The Figure 1 shows the production of handicrafts and noteworthy is that the bulk of this trade takes place trend value year wise during 1980-91 to 2010-11. As it is beyond the aegis of the state and through private hands evident from the figure that the actual value of production un-aided by the state. This again is ironically due to the during the period of 1989-90 to 1998-99 was lower than militancy that swayed the state in the 1990s. Itinerant the value of linear trend line, which shows that the Kashmiri handicraft merchants forced into hawking their production of handicraft sector has not flourished during wares house-to-house in many Indian cities became a this period. After that the production of handicrafts shows common sight. This strategy was necessitated by the fact an increasing trend up to the period of 2008 and from the that a major source of demand—tourists—had stopped peak seasons of turmoil, i.e. summer 2008, 2009 and visiting the valley (Omera, 1990). Soon Kashmiri 2010 the production of handicrafts has decreased a lot handicraft dealers had hit upon the novel idea of setting i.e. from Rs. 1614.59 during 2007-08 to Rs.1100 in 2008- up shop in those parts of India where visitors thronged, 09, Rs.1000 in 2009-10 and Rs. 325 in 2010-11. such as Goa, Delhi, and Kerala. Thus, Kashmiri handicrafts facing the vicissitudes of militancy adopted such measures and tactics whereby they were able to Exports of handicrafts overcome the limitations of the market defined by tourist arrivals in the Valley and integrate themselves with the Kashmiri handicrafts, especially its shawls and hand national and global economy. This sector did so without woven carpets, are also very renowned and have much help from the state and in extremely difficult economic potential in exports and the ability to create conditions. They were able to do so because handicrafts such handicrafts and export them to other areas of the remain a business where much of the production takes world in which such commodities are rare and valuable place indoors. Curfews do not affect production and could raise many women and families out of the difficult demands on infrastructure are few. Thus production is situation of poverty (Darakhshan, 2011). The Table 2 not affected by militancy. The nature of its markets does shows year wise exports of handicrafts of J & K state not call for a “just-in-time” system, and as such small during last three decades. disruptions in supply are easily absorbed. This is in The Table 2 that the export of handicrafts has marked contrast to sectors such as small and medium decreased during the initial years of conflict, that is, 80 Int. NGOJ.

Table 1. Year-wise production of handicrafts and its trend value.

Year Actual value of Production (Rs. in crores) Y=36.71X−146.30(Trend value of production) 1980-81 53.82 −109.59 1981-82 68.57 −72.88 1982-83 81.37 −36.17 1983-84 91.10 −0.54 1984-85 97.85 36.84 1985-86 105.00 73.96 1986-87 108.40 110.67 1987-88 109.29 147.38 1988-89 154.00 184.09 1989-90 150.00 220.80 1990-91 200.00 257.51 1991-92 220.00 294.22 1992-93 230.00 330.52 1993-94 240.00 367.64 1994-95 245.00 404.35 1995-96 250.00 441.06 1996-97 260.00 477.77 1997-98 260.00 514.48 1998-99 280.00 551.19 1999-00 633.03 587.90 2000-01 696.33 624.61 2001-02 765.94 661.32 2002-03 775.00 698.03 2003-04 821.53 734.74 2004-05 887.00 771.45 2005-06 900.00 808.16 2006-07 950.00 844.87 2007-08 1614.59 881.58 2008-09 1100.00 918.29 2009-10 1000.00 955.00 2010-11 325.00 991.71

Source: Directorate of Handicrafts J & K Government.

during 1989-90 and 1990-91 the exports of handicrafts during 2007-08 to Rs.705.50 in 2008-09, Rs.661.27 in were Rs.50.70 and integrate with the national market. 2009-10 and Rs. 142 in 2010-11 (Annual economic Thus, the state of and Rs.34.60 respectivelly and during survey J&K, 2010-2011). last three years that is, 2008, 2009 and 2010 the exports Notwithstanding the fact that Kashmiri arts and crafts of handicraft also decreased contineously. have enjoyed worldwide fame and name, their production The Figure 2 shows year wise exports of the handicraft in the valley in 1989. Not only their production but also sector and its trend value during the reference period of quality wise they are now less superior to the goods 1980-91 to 2010-11. As it is evident from the above figure produced in China, Nepal and Iran. Due to this reason, that the actual value of exports during the reference nowadays the export trade has not been able to capture periods of 1989-90 to 1992-93, 1994-96 and 1996-97 to its due share in the potential markets. 1998-99 has been decreased a lot as it is shown clearly The only way to promote handicraft industry in the from the divergence of actual value of exports from that valley is to develop the tourism industry in Kashmir. As of linear trend value. After that the production of the main buyers for the handicrafts goods in Kashmir are handicrafts shows an increasing trend up to the period of the tourists. The more the number of tourists increases in 2008 and from the peak seasons of turmoil, that is, Kashmir, the more will be the demand for handicrafts summer 2008, 2009 and 2010 the production of items (Manzoor, 1991). So unless and until the tourism handicrafts has decreased a lot that is, from Rs.1200.47 industry is not developed up to full extent the economic Ahamad and Yasmin 81

Production of handicrafts 1800 1600 1400 1200 Actual value of Production (Rs. in 1000 crores) 53.82 800 68.57 81.37 91.1 600 400 Y=36.71X−146.30( Production (Rs. in crores) in (Rs. Production Trend value of 200 production) −109.59 −72.88 0 −36.17 −0.54

Year

Figure 1. Production of handicrafts and trend value year-wise during 1980-91 to 2010-11.

Exports of handicrafts 1400

1200 ) 1000 Exports (Rs.in crores) 800 39.87 36 33 37

600

400

Exports(Rs. in crores in Exports(Rs. Y= 28.49X−134.40 −105.91 −77.42 −48.93 200 −20.44 0

Year

Figure 2. Year wise exports of the handicraft sector and its trend value during the reference period of 1980-91 to 2010-11.

backwardness, the problem of unemployment, low per of arts and crafts in Kashmir increases to same extent as capital income and the deteriorating situation of shown in table, but the comparative growth of Kashmir handicraft industry will continue. Though the production arts and crafts with suffered to a large extent with the 82 Int. NGOJ.

Table 2. Year wise Exports of handicrafts and its trend value.

Year Exports (Rs.in crores) Y= 28.49X−134.40 1980-81 39.87 −105.91 1981-82 36.00 −77.42 1982-83 33.00 −48.93 1983-84 37.00 −20.44 1984-85 33.92 8.05 1985-86 40.00 36.54 1986-87 43.16 65.03 1987-88 62.62 93.52 1988-89 65.83 122.01 1989-90 50.70 150.50 1990-91 34.60 178.99 1991-92 130.94 207.48 1992-93 168.00 235.97 1993-94 213.36 264.46 1994-95 111.65 292.95 1995-96 294.20 321.44 1996-97 88.14 349.93 1998-99 247.00 378.42 1999-00 556.99 406.91 2000-01 439.90 435.40 2001-02 504.25 463.89 2002-03 549.20 492.38 2003-04 595.00 520.87 2004-05 642.00 549.36 2005-06 705.00 577.85 2006-07 785.00 606.34 2007-08 1200.47 634.83 2008-09 705.50 663.32 2009-10 661.27 691.81 2010-11 142.00 720.30

Source: Directorate of Handicrafts J & K Government.

broke down of turmoil respect to other Indian states world with its traditional crafts. But the state of Jammu lowered down during the period of turmoil. If we compare and Kashmir and in particular the Kashmir Valley has and examine the percentage share of Kashmir arts and suffered severe economic setbacks due to turmoil in the crafts in India’s to arts and crafts exports in the year region over the past 20 years. Every sector of economy (1979-80), it was 12.65%. In the subsequent years the has been affected, be it handicrafts production, the share decreased to 6.33% up to (1984-85). During the horticulture sector, medium and small-scale industrial year when the turmoil in the valley was at its peak the units, the tourism sector etc. Notwithstanding the fact that average share of Kashmiri arts and crafts in India’s total Kashmiri arts and crafts have enjoyed worldwide fame arts and crafts exports from (1991-97) was 5.23% (A and name, their production suffered to a large extent with Report, 2009-2010). the broke down of turmoil in the valley in 1989. Not only their production but also quality wise they are now less superior to the goods produced in China, Nepal and Iran. Conclusion From 2003-08 there has been an increasing trend but thereafter it has declined due to turmoil and unrest during The handicraft sector has a large potential to generate a the peak seasons that is, summer 2008, 2009 and 2010 gainful employment opportunities to unemployed people in Kashmir. Besides exacting extensive damage to the and has a great potential for economic development of a infrastructure of the region, the violent conflict has country/region like Kashmir, which is known all over the discouraged private investment, pushing the economy Ahamad and Yasmin 83

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